Users of Accounting Information

Internal users
External users

1. Internal Users

The internal users are owners, management and employees who are within the organization.

Owners

The owners of a business provide capital to be used in the business. They are interested to know whether the business has earned profit or not during a particular period and also its financial position on a particular date.

Management

The trends in sales and purchases, relationship of expenses to the sales, efficiency of employees, comparative profitability of different departments, capital structure and solvency position are some of the vital data required by management for planning and controlling the business operations.

Employees

The employees are interested in the profit earning capacity of the business which will affect their remuneration, working conditions and retirement benefits and stability and growth of the enterprise

2. External users

External users are the persons who are outside the organisation but make use of accounting information for their purposes. They are:

Creditors and financial institutions

Suppliers of goods and services, commercial banks, public deposit holders and debenture holders are included in this category.

Investors

Persons who are interested in investing their funds in an organisation should know about the financial condition of a business unit while making their investment decision

Customers

Customers who buy and use the products and services of business enterprises are interested in knowing the details of the products and the prices charged to them.

Tax authorities and other regulatory bodies

Accounting information helps the tax authorities in computing income tax and taxes on goods and services and other taxes to be collected from business units.

Government

The scarce resources of the country are used by business enterprises. Information about performance of business units in different industries helps the government in policy formulation for development of trade and industry, allocation of scarce resources, grant of subsidy, etc.

Researchers

Researchers to carry out their research can use accounting information and make use of the published financial statements for analysis and evaluation.General public

General public

From accounting information, the general public at large can get a view of the earning capacity and stability of the enterprise as well as the social responsibility measures undertaken by the enterprise particularly in its area of operation and also the employment opportunities provided to the local people.